A Solid Foundation for Growth

Big projects now under construction promise to open up still more opportunities for the future

Cyclical low prices for two key commodities, natural gas and lumber, might have spelled bad news for the economy of B.C.’s Northeast last year but for one important factor: the lavish capital spending in the region, mostly on energy megaprojects. “As of the first quarter of 2019, the combined capital value of all projects at various stages of construction in the Northeast was $18.3 billion, up 37 percent from a year ago,” noted Central 1 Credit Union economists in an economic analysis released last September.

Work on BC Hydro and Power Authority’s $10.7-billion Site C dam, just seven kilometres southwest of the regional hub of Fort St. John, is now in full swing. Crews finished pouring concrete for the first of three buttresses to support the powerhouse, spillway and dam itself at the end of October 2019. As of November, there were 4,650 workers employed on the project, BC Hydro reported—3,445 (74 percent) of them from B.C. and 771 (20 percent) from the surrounding Peace River Regional District.

Just starting up is TC Energy’s Coastal GasLink pipeline, which has a budget of $6.6 billion and is scheduled for completion in 2023. Although the 670-kilometre pipeline will ultimately cross all four northern development regions, its impact is likely to be felt most profoundly in the Northeast as it triggers further tie-in pipelines around its origin site west of Dawson Creek. More important, Coastal GasLink and the LNG Canada export project at its western terminus are expected to stimulate natural gas exploration and production throughout the Northeast, as well as in neighbouring northwestern Alberta.

Even the “Small” Projects Are Big

Last October, despite the challenging commodity price and financing environment for the oilpatch generally, Tourmaline Oil announced that it would be spending $1.7 billion in the area over the next five years. Among other things, the Calgary-based company intends to double the capacity of its Gundy gas processing plant.

Other significant projects under construction include BC Hydro’s Peace Region Electricity Supply Project, the Fort St. John Town Centre development and a new $43-million RCMP detachment in the same city.

Looking ahead, the Sundance Clean Methanol Refinery in Chetwynd is in the permitting stage, with a value of $1.5 billion, along with the Sundance Low Carbon Gasoline Refinery ($2.5 billion), located on the same site. Enbridge Frontier, a subsidiary of midstream energy giant Enbridge, has proposed a $2.5-billion “straddle plant” west of Chetwynd that would produce natural gas liquids for further processing in B.C., most likely around Taylor. (Thanks to a recently completed AltaGas terminal in Prince Rupert, northeastern producers can now export butane and propane directly to Asia.)

This year Australian investment bank Macquarie Capital and FortisBC lined up behind Renewable Hydrogen Canada, which aims to build a $200-million hydrogen electrolyzer plant in Chetwynd that would help advance the province’s CleanBC climate change policies. There are also several coal mining and wind-oriented utility projects in the consultation and approval phase, though none of these currently have hard timelines.

Completed projects over the past year include the Wyndwood Pipeline Looping Project and North Pine Natural Gas Liquids Facility. Another positive development for jobs locally is the reopening since 2016 of the Brulé, Willow Creek and Wolverine coal mines by new owner Conuma Coal Resources. That development restored 900 direct and 3,000 indirect jobs to Tumbler Ridge and the surrounding area. Both the volume and value of metallurgical coal exports to the Far East through the Port of Prince Rupert held up last year after a strong increase in 2018.

The investments in industrial projects are creating confidence on the residential and commercial side of the region’s economy as well. Fort St. John issued $28.8 million worth of building permits in the first half of 2019, double the amount over the same period a year earlier. Turning up in the No. 6 spot in BCBusiness’s Best Cities for Work list in 2020, the city boasts an average household income of $138,185—among the highest in the province. And in contrast to B.C.’s more expensive southern markets, home prices continued to strengthen over the year.